Cui Dongshu: In February, the trading volume of the national used car market of 1.39 million units fell 5% month-on-month, and increased 15.78% year-on-year

The Zhitong Finance App learned that Cui Dongshu, Secretary General of the Passenger Transport Association, said that in February 2025, the sales volume of the national used car market was 1.39 million units, down 5% from the previous month, up 15.78% year on year, and the transaction amount was 89.9 billion yuan, up 7.5% year on year. From January to February 2025, the cumulative volume of used car transactions was 2.85 million units, a year-on-year decrease of 1.3%, and the transaction volume was 186.2 billion yuan, a decrease of 5%. With the explosive growth of new vehicle sales in the NEV market, the NEV penetration rate reached 9.1% in February 2025.

Cui Dongshu believes that currently used cars in China are in a stage of rapid rise, and the potential for future development is extremely huge. In particular, the development of new energy vehicles has given more ordinary Chinese consumers an advantage of low cost in buying and using cars. With the release of the national end-of-life renewal policy, the car dealer group's used car business and car scrap renewal are booming. The potential for used car development in China is extremely huge. The phased target for trade-in this year has exceeded expectations, and some regions have exceeded pre-determined subsidies ahead of schedule. Trade-in 2025 is bound to be a strong growth.

1. Industry development returns to the fast track

Used car trading was active from January to May 2024, and the trend was relatively stable after June-August. With the promotion of trade-in and other policies, used car trading was relatively active in September-December. In particular, the effects of used car warping in December were obvious. Used car transactions were weak in January 2025 and gradually picked up in February.

In recent years, used cars have shown rapid development, rising all the way from 6 million units in 2014 to 17.59 million units in 2021. The scale has grown by 11 million units over 7 years, and the sharp increase is relatively strong. In 2022, the overall volume of used car transactions was relatively low, with a year-on-year decline of 9%. Since 2023, the used car industry has returned to the fast track. In 2023, used car sales reached 18.41 million units, an increase of 15% over the previous year. From January to December 2024, the cumulative volume of used car transactions was 19.614,200 units, an increase of 6.52% year-on-year, and an increase of 1.02 million units compared with the same period.

In February 2025, the national used car market traded 1.39 million units, down 5% from the previous month, up 15.78% year on year, and the transaction amount was 89.9 billion yuan, up 7.5% year on year. From January to February 2025, the cumulative volume of used car transactions was 2.85 million units, a year-on-year decrease of 1.3%, and the transaction volume was 186.2 billion yuan, a decrease of 5%.

Due to the continuous improvement of the level of used car transactions, the volume of used car transactions gradually increased in previous years. Used car transactions reached 105.96 billion yuan in 2022, reached 1179.5 billion yuan, an increase of 11% in 2023, and the cumulative transaction amount in 2024 was 1285.205 billion yuan, reflecting the continuous increase in the scale of used car transactions. The transaction volume from January to February 2025 was 186.2 billion yuan, a decrease of 5%. The growth rate of transaction volume was significantly slower than the growth rate of transaction volume.

2. Used car transaction structure

The pattern of the used car market shows that the car market continues to grow, while the bus market shrinks relatively. The overall structure of the used car market and new cars are moving towards high-end consumption of SUVs and MPVs.

3. Used car trading age

Used cars performed well in second-hand car transactions, mainly as a component of NEVs becoming used cars. Looking at the current trading structure of used cars: used cars within three years have gradually decreased. The overall proportion reached 26.9% in January-February 2025, and 49.4% in 3-6. The increase is quite remarkable. Both ratios are relatively high. In other words, used cars within 6 years account for 76%, while used cars in 7-10 years only account for 15.3% in January-February 2025. Used cars over 10 years of age fell to 8.4% in January-February 2025.

Currently, when looking at middle-aged and older vehicles, transactions are not particularly frequent. With the continuous improvement of automobile product technology, the vehicle quality guarantee for older vehicles is getting better and better, and there is also huge potential for future growth in the scrapping and renewal of such middle-aged and elderly vehicles.

Due to its short development period, the Chinese car market is relatively short compared to the age of used car transactions in mature countries. The share of used cars in China in 3-5 years and used car transactions in 1-3 years is relatively high, while most used cars traded in developed countries such as the US are over 5 years old. In particular, used cars over 8 years old account for a relatively high share of used cars in France and Japan.

4. Used car transaction price trends

In the previous two years, the average price trend of used car transactions developed towards the middle and high-end. The share of used cars worth 80,000 to 150,000 yuan increased markedly, while the share of models under 30,000 yuan rose, and products of 30,000 to 50,000 yuan declined slightly.

5. New energy used car trading strengthened

With the explosive growth of new vehicle sales in the NEV market, the scale of NEV used vehicle ownership is also increasing. As a result, the NEV used car penetration rate continues to increase, from 3.6% at the end of 2022 to 6.7% in December 2023, and the NEV penetration rate reached 8.4% in 2024. The penetration rate of new energy vehicles continues to rise in 2025, reaching 9.1% in February. Compared to the share of NEV owners, the share of used NEV transactions is basically growing at the same time. In the future, with the rapid growth of new energy vehicles and the gradual stabilization of prices, new energy used vehicles have great potential for development.

6. Trends in the age of new energy used cars

In the first quarter of 2025, 28.2% of the country's new energy used vehicles had a service life of less than 2 years, a slight increase over the same period last year.

In the first quarter of 2025, the usage period of 2-4 years accounted for 44.7%, a significant increase over the same period last year, and is currently at the middle level.

In the first quarter of 2025, trading volume with a usage period of 4-6 years accounted for 13.3%, which is relatively low compared to last year.

In the first quarter of 2025, the proportion of people over 6 years reached 13.9%, a slight increase over the same period last year.

Overall, in 2025, there will be an increase in the number of underage used cars in the NEV age structure, and the market is more active.

7. New energy used car transaction price

The transaction price of new energy used cars has increased markedly. Recently, the share of 80,000-150,000 yuan models in transactions has increased dramatically. As the end-of-life renewal and trade-in policies have boosted the growth of old new energy used vehicles, sales of models under 30,000 have recently increased.

The current residual value advantage of the scrapping of new energy vehicles is gradually being reflected, and the scrap renewal policy pushes more used cars to speed up scrapping and renewal.

8. Used car transfer ratio

The transfer rate of used cars fluctuates between 25 and 30%, reaching a current historical high of 29.1% in the first quarter of 2025. Looking at it now, due to the increase in the convenience of used car transfers, the proportion of used car transfers has risen to a high level.

Currently, Beijing and Shanghai are the two main export regions for used car transactions, and Anhui, Shandong, and Jilin are also the main areas where used car transactions flow in. The Beijing region's used car outflow is relatively strong and has always occupied the first place, which shows that the scale of used car outflows from the Beijing market is relatively strong.

9. Used car inventory time

Used car inventories are currently declining slightly. In the first quarter of 2025, the used car inventory pressure has improved relatively. In particular, the share of used car inventories over 30 days in the first quarter of 2025 fell by 34%; used car inventories for 15-30 days had a lower ratio of 40%; while the proportion of used cars within 15 days was 26%. Looking at it now, I feel that the overall operating pressure of used cars will gradually improve in 2025. With the gradual promotion of the new car policy, the transaction price of used cars is actually affected by the decline in the actual transaction price of new cars, which has led to a reduction in the price difference of used cars, which has also put a certain amount of pressure on the used car business.

10. Used car value preservation rate

Currently, the three-year value preservation rate for new energy vehicles is generally at a low level, which is completely normal in a rapidly developing market. The monthly changes in new energy are not very regular, but the value preservation rate is significantly higher than in the previous two years. This should also be unsustainable. After all, new energy vehicles are a durable consumer goods concept, and there is no vehicle purchase tax, so the value preservation effect should be significantly lower than that of fuel vehicles. Due to the fierce price war for fuel vehicles, the value preservation rate has also declined slightly.

The value preservation rate of independent brands is on a downward trend. Manufacturers are launching new brands and striving to be high-end, but prices have not shown an advantage in the second-hand market. The continued decline in used car prices has led to the withdrawal of some car dealers. This is similar to the fierce competition in the new car market, and the transformation and clearance of the industry is inevitable.

There is a clear judgment on the price reduction of used cars at the macro level. The scrapping of old cars will stimulate new car sales and may replace the previous replacement path. Due to the battery residual value factor, the residual value of new energy vehicles is higher. As the price of lithium carbonate gradually stabilizes, the value preservation advantages of long-age NEVs will also be reflected.